Improving economic indicators don't mean the broader economy is following suit, and politicians seeking re-election this year may be out of a job, says Christopher Whalen, Senior Managing Director of Tangent Capital Partners in New York.

Unemployment rates are falling but mainly due to more people exiting the labor force and are no longer factored into the percentage rate, which makes it seem fewer people are out of work than in reality.

Meanwhile, consumer sentiment and auto sales figures have bumped up but mainly due to improvements in parts of the economy or due to seasonal factors.

"Certainly the fatigue that Americans feel after almost five years of crisis has not gone away," Whalen tells Newsmax TV.

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"I think all incumbents and not just Democrats and Republicans, in particular, but all incumbents are going to be facing a very tough road in terms of reelection this year."

Sectors focusing on trade, the auto industry and energy are doing well as are many others that aren't tied to the battered housing industry, while consumer sentiment is improving.

Yet consumer sentiment tends to rise in the spring anyway, Whalen says, which would account for increased spending and rising credit-card balances.

"But with all of that said, I really don't think we have enough underlying growth to fix the situation. We need different leadership," Whalen says.

That means different leadership in both the White House and in Congress.

"We have gotten zero leadership out of the Congress in part because they are fighting with one another," Whalen says.

Turning to housing, which threw the country into the Great Recession and continues to hamper its revival today, Whalen says full recovery is a long way off, and the sector will probably never see its pre-recession strength again.

Credit is not available for those willing to buy like in the past and many would-be buyers don't have the income to buy houses for sale anyway.

The whole economy is redefining itself thanks to the changing nature of the housing sector.

"Remember consumption is three-quarters of the economy and an awful lot of that consumption is related to housing. So if we are changing the model in terms of home ownership, if we have larger households, we don't need as many houses, and if we have fewer homebuyers, I think that's going to change the dynamic," Whalen says.

"This is important because Americans were using housing as a source of income. If they can't refinance and get access to credit, then we are going to have slower growth."

Meanwhile the Federal Reserve can't help much.

Since the downturn, the Fed has slashed interest rates to near zero and have bought trillions of dollars in bonds and other assets from banks, injecting them with liquidity in the process with the aim of spurring growth by keeping long-term borrowing costs low.

Such asset purchases, known officially as quantitative easing but dubbed by many as printing money out of thin air, aim to stave off further decline but arguably lay the seeds for inflation down the road.

The Fed should at least work to bring its benchmark lending rate, the fed funds target rate, up from its current level of zero to 0.25 percent to around half a point to protect those who save from seeing inflation eat away at their investments.

"If we don't let rates go up and let savers earn money so Grandma can buy Christmas presents, for example, or buy groceries, and if we don't let insurance companies start to earn money on their investments again, we're going to have a big problem next year," Whalen says.

"I think Morgan Stanley and some of the other broker-dealers in New York are literally going to fall apart next year because they are not making anything on their inventories — repos, securities lending, all of these old-fashioned businesses were particularly a third of the profits of a broker-dealer in a given year," Whalen says.

"But under the Fed's policies, no savers, whether you are talking about individuals or corporates, are making any money," he adds.

"Let's get the fed funds rate up to half a point. Then, at least, you'd start seeing banks lending to each other again, they'd start lending securities again and we could rebuild the marketplace."